Huawei executive’s arrest will not hinder trade talks with China, Kudlow says

Despite a strain in the relationship between Beijing and Washington following the arrest of an executive of Chinese electronics giant Huawei in Canada at the U.S.’ behest, one of President Trump’s top economic advisers doesn’t believe trade talks between the two superpowers will be affected. White House Economic Adviser Larry Kudlow said on “Fox News Sunday” … Continue reading “Huawei executive’s arrest will not hinder trade talks with China, Kudlow says”

Despite a strain in the relationship between Beijing and Washington following the arrest of an executive of Chinese electronics giant Huawei in Canada at the U.S.’ behest, one of President Trump’s top economic advisers doesn’t believe trade talks between the two superpowers will be affected.

White House Economic Adviser Larry Kudlow said on “Fox News Sunday” that while some issues still need to be sorted out between the U.S. and China, the trade talks between the countries are going well.

“China has finally issued some very positive statements,” Kudlow said. “They agree with the timetable. They agree with the deadlines."

Kudlow added: “There are a lot of good things out there.”

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The major issue of contention between Washington and Beijing at the moment is the December 1 arrest of Meng Wanzhou in Vancouver trying to evade U.S. trade curbs on Iran.

Meng, the daughter of Huawei's founder, was detained at the request of the U.S. during a layover at the Vancouver airport on the same day that Trump and his Chinese counterpart, Xi Jinping, agreed over dinner to a 90-day cease-fire in a trade dispute that threatens to disrupt global commerce.

The U.S. alleges that Huawei used a Hong Kong shell company to sell equipment in Iran in violation of U.S. sanctions. It also says that Meng and Huawei misled American banks about its business dealings in Iran.

Huawei is the biggest global supplier of network gear for phone and Internet companies and has been the target of deepening U.S. security concerns over its ties to the Chinese government. The U.S. has pressured European countries and other allies to limit use of its technology, warning they could be opening themselves up to surveillance and theft of information.

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Meng's arrest has threatened to increase U.S.-China trade tensions and shook stock markets globally last week. But U.S. Trade Representative Robert Lighthizer, speaking on CBS' "Face the Nation," downplayed the impact of the arrest on trade talks between the two countries aimed at defusing the tensions.

"It's my view that it shouldn't really have much of an impact," he said.

The surprise arrest raises doubts about whether the trade truce will hold and whether the world's two biggest economies can resolve the complicated issues that divide them.

The Associated Press contributed to this report.

Should Trump be warning of retaliation over GM layoffs?

President Trump is pointing fingers on the economy.

The country's sustained boom, of course, has been one of his major selling points, with jobless numbers not seen in decades and a stock market that soared until the recent downturn.

But some recent bursts of bad news have Trump slamming both General Motors and his hand-picked Fed chairman.

It's not hard to grasp why the president is hitting the giant automaker after its announcement that it would cut 15,000 jobs and close plants in Ohio, Michigan and Maryland (but not Mexico and China). He's obviously trying to pressure the company.

But I'm surprised there's not more of a backlash against this tweet:

"The U.S. saved General Motors, and this is the THANKS we get! We are now looking at cutting all @GM subsidies, including for electric cars."

How can the president talk about retaliating against one particular company because he doesn't like its policies? Federal subsidies usually go to whole industries, not particular corporations. GM would have a pretty good lawsuit if it was singled out for punishment.

And if Barack Obama, who engineered the 2009 federal bailout of GM, had made such a comment, the right would have exploded. There would have been an uproar about picking winners and losers.

As a career businessman, Trump should understand that CEO Mary Barra has to do what's in the best interests of her company and her shareholders. She's making these moves because many of her cars aren't selling well. (Know anyone who has a Chevy Cruze?)

In fact, like other American carmakers, GM is all but getting out of the business of making passenger sedans, which is dominated by the Japanese, in favor of SUVs, trucks and electric and hybrid cars.

As the Wall Street Journal's conservative editorial page put it yesterday, "President Trump believes he can command markets like King Canute thought he could the tides. But General Motors has again exposed the inability of any politician to arrest the changes in technology and consumer tastes roiling the auto industry."

This isn't the first time Trump has scolded corporations; he questioned Amazon postal subsidies (Jeff Bezos owns the Washington Post) but hasn't done anything about it.

The only subsidies involving GM actually go to consumers who get a $7,500 tax credit for buying battery-powered or hybrid cars (much of this has gone to Tesla buyers). But the credit is greatly reduced after a company’s first 200,000 vehicles, and GM has already sold 190,000 such cars.

Meanwhile, Trump went after his Fed chairman, Jerome "Jay" Powell, in a Post interview.

"So far, I'm not even a little bit happy with my selection of Jay," the president said. "Not even a little bit. And I'm not blaming anybody, but I'm just telling you I think that the Fed is way off-base with what they're doing."

Actually, he is blaming someone. And while it's not unusual for presidents to be frustrated with the Federal Reserve for tapping on the brakes, Trump, of course, doesn't hold back — even when it's his guy.

"I'm doing deals, and I'm not being accommodated by the Fed. They're making a mistake because I have a gut, and my gut tells me more sometimes than anybody else's brain can ever tell me."

Yes, we can't have Government by Gut. But Trump's gut did get him elected. It does not, however, have the power to reverse industry layoffs or force an independent agency not to hike interest rates.

Howard Kurtz is a Fox News analyst and the host of “MediaBuzz” (Sundays 11 a.m.). He is the author “Media Madness: Donald Trump, The Press and the War Over the Truth.” Follow him at @HowardKurtz. Click here for more information on Howard Kurtz.

Kamala Harris, Cory Booker ‘basic income’ plans likely remove work incentive, think tank says

Two Democrats in the U.S. Senate – both said to be eyeing the party’s 2020 presidential nomination — recently announced so-called “basic income” plans for America’s lower-income families. A liberal publication, meanwhile, says neither plan goes far enough to aid families, and the government should instead just start “writing them checks.”

Sen. Kamala Harris is proposing a new tax credit. Sen. Cory Booker proposes "opportunity accounts." (Associated Press)

But the Heritage Foundation argues that such plans tend to fail, in part because they tend to remove the incentive for work.

In October, Sen. Kamala Harris, D-Calif., unveiled her LIFT the Middle Class Act. It would provide a tax credit of up to $6,000 a year to families earning less than $100,000 a year, and a credit of up to $3,000 for those earning less than $50,000 a year, the Washington Times reported.

“Middle class families deserve to know that one unexpected cost won’t lead to a financial emergency,” Harris tweeted last month, when the plan was unveiled. “The LIFT the Middle Class Act that I introduced would help address the rising costs of housing, tuition, childcare, and more.”

But the nonpartisan Tax Policy Center estimated earlier this month that Harris’s plan would add $2.8 trillion to the federal deficit over its first decade and another $3.4 billion over its second decade, the Washington Post reported.

Harris proposed paying for her plan by canceling parts of the Republican Party’s tax cuts and charging a new tax on banks and other financial institutions, the report said.

Meanwhile, Sen. Cory Booker, D-N.J., proposed last month the creation of “opportunity accounts” for the nation’s children, which could grow to about $46,000 per child by the time they turn 18, Business Insider reported.

“Today, nearly one in three American families have zero to negative wealth, and it’s hard to get ahead if you begin life behind the starting line,” Booker said of the plan, the Washington Times reported.

Watchdog.org estimated that Booker’s plan would cost American taxpayers at least $60 billion annually.

But liberal publication the Nation claims that both wealth distribution plans fall short.

“Harris’s plan suffers from two problems,” author Bryce Covert writes in the publication. “The first is who she leaves out. By matching only the income that poor families earn from work, it omits those who don’t earn anything.”

“Harris’s plan suffers from two problems. The first is who she leaves out. By matching only the income that poor families earn from work, it omits those who don’t earn anything.”

— Bryce Covert, writing in the Nation

The second problem with Harris’s plan, he writes, “is that she still relies on giving money to families through the tax code, an opaque and complicated way of doing it.”

Covert then hails Booker’s plan for “sending money straight to the people who need it,” but says it “mistimes the assistance,” providing it when youths reach adulthood, “when most families are more economically stable.”

He suggests instead that both plans be set aside in favor of Russell Sage Foundation researchers’ suggestion that parents be sent “at least $250 a month for each child,” a plan estimated to cost U.S. taxpayers $190 billion per year.

“That’s still less than what’s been estimated for Harris’s plan,” Covert writes, “and less than the recent Republican tax cuts are likely to cost over the next three years.”

But the Heritage Foundation’s Vijay Menon wrote last month that plans similar to the recent liberal proposals have been tried before – only to fail.

Menon writes that a “negative income tax” experiment ran in six states from 1968 to 1980, and was documented by libertarian writer Charles Murray, author of “Losing Ground.”

“In ‘Losing Ground,’” Menon writes, “Murray concluded that the effect of the negative income tax on reducing work was ‘unambiguous and strong.’ ”

“If recipients lost their jobs during the experiment,” Menon notes, “they experienced significantly longer spells of unemployment compared with non-recipients — more than two months longer for husbands, almost a year longer for wives, and longer still for single mothers.”

In summary, Menon writes, such plans are “a misguided approach.”

“Policy should be designed to reward work, rather than replace it,” Menon writes. Therefore, a better alternative to a universal basic income would be to expand the earned income tax credit.”